State Bank of India (SBI), the country’s largest lender, has released some FAQs to answer customers’ queries on loan restructuring during the COVID-19 pandemic.
The bank released two sets of FAQs – one for personal loans and another for borrowings in the non-personal segment, such as corporate loans.
SBI also launched an online portal where customers can check their eligibility under the resolution framework.
Here are the the highlights from the FAQs on personal loans:
What kinds of loans are covered?
EMIs on housing and related loans, education loans, auto loans, and personal loans included in the scope of the resolution framework.
The loan should be a “Standard Account” as on the date of application for
relief under this framework and should have been “standard” and also not in default for more than 30 days as on March 1, 2020.
Loans taken after March 1 but affected by the COVID-19 pandemic will not be covered by SBI’s resolution framework.
What is the eligibility criteria?
SBI has specified four eligibility conditions for personal loans affected by the COVID-19 pandemic:
> Reduction in salary/income in August 2020 when compared with February 2020
> Reduction/suspension in salary during lockdown period
> Job loss/closure of business
> Closure during lockdown/reduced activity of units/shops/business
establishments in case of self-employed/professionals/businessmen
What is the relief provided?
A moratorium of up to a maximum of 24 months can be granted, where the borrower will not have to pay EMIs.
The other relaxation that can be provided is rescheduling of instalments and extension of tenure by a period equivalent to the moratorium granted subject to a maximum of two years
Will there be any change in pricing of my loan ?
Yes, borrowers will be required to pay additional interest of 0.35 percent per annum over and above the current pricing for the remaining tenure of the loan, in order to offset partial cost of additional provisions required to be made by the bank.
How can a customer apply for relief?
The last date to apply for relief under the framework is December 24, 2020. SBI’s customers can apply online on the bank’s website, or visit a branch.
Supporting documents required include letter of discharge, salary slips, account statements, and declaration by self-employed professionals/ businessmen declaring that their business is affected by COVID-19.
No additional fee will be charged, and the bank will process the request within 7-10 working days.